HELENA — Since the launch of Montana’s adult-use recreational marijuana system in 2022, the state has put limits on who can enter the market. Now, state lawmakers are looking at possibly extending the limits, but in a much different form.

Earlier this month, the Montana Legislature’s Economic Affairs Interim Committee held a preliminary discussion on several marijuana-related bills that could be proposed for the 2025 session. One would freeze the number of marijuana dispensaries and other facilities for two years.

Since the start of legal sales, Montana has had a moratorium, allowing only providers who had been licensed in the state’s medical marijuana system to join the recreational market. It was initially set to expire June 30, 2023, but the Legislature voted last year to extend it two more years.

While the number of licensees was limited, those providers were allowed to open additional “licensed premises,” including dispensaries. The proposed legislation – still in a very early form and subject to change – would prevent any business from adding a new licensed premise between July 1, 2025, and June 30, 2027.

“This time, we’re talking about a freeze on all cannabis-related business location licensing, so no new growers, no new kitchens, no new storage facilities, no new dispensaries – they’re the part the public are really going to notice,” said Pepper Petersen, president and CEO of the Montana Cannabis Guild.

The committee referred to the proposal as an extension of the moratorium, but marijuana industry representatives said it’s essentially an entirely new policy, because it would remove the requirement that licensees be former medical providers. That would allow licensees to sell or transfer their businesses to new owners who haven’t previously been in the system.

Petersen said people in the industry understand that many Montanans feel there are enough – or too many – dispensaries in the state. He believes local governments should be taking more active steps to limit the growth of dispensaries through zoning or other regulations.

“We’ve suggested to local governments for two years or more now that they put a number of restrictions on when, where and how dispensaries can open,” he said.

Local governments like Cascade County have looked at ways to regulate marijuana businesses. Next month, the city of Missoula is set to hold a public hearing on a proposal to pause issuing business licenses for new dispensaries.

“When Missoula, Montana, one of the most liberal cities in the state – one of the most marijuana-friendly cities in the country – has said we’ve got too many dispensaries, that reverberates through the state Legislature,” Petersen said.

During the committee meeting, lawmakers also talked about putting together a bill draft to clarify what authority local governments have to put regulations on marijuana businesses. In addition, they looked at a “cleanup” bill to make some technical changes to marijuana laws, as well as a proposed resolution to support the federal SAFER Banking Act, which would allow legal marijuana businesses to access banking services. The committee is set to take a closer look at all of the proposals, including potential amendments, at a meeting in August.

A judge ruled that a Montana law which defined “sex” in state law, when referring to a person as only male or female, was unconstitutional, saying that the law’s description did not explicitly state its purpose.

District Court Judge Shane Vannatta struck down the 2023 law on Tuesday after a group of plaintiffs who identify as transgender, nonbinary, intersex and other identities sued, arguing the law denies legal recognition and protection to people who identify as gender-nonconforming, according to The Associated Press.

Vannatta did not address the claim of a lack of legal recognition and protection, but did say that the bill’s title did not adequately explain whether the word “sex” referred to gender or sexual intercourse and that it did not indicate the words “male” and “female” would be defined in the body of the bill.

“The title does not give general notice of the character of the legislation in a way that guards against deceptive or misleading titles,” Vannatta wrote.

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Montana’s law, S.B. 458, is similar to ones passed in Kansas and Tennessee.

The bill sought to revise laws to “provide a common definition for the word sex when referring to a human,” the text reads.

It defines “male” as “a member of the human species who, under normal development, has XY chromosomes and produces or would produce small, mobile gametes, or sperm, during his life cycle and has a reproductive and endocrine system oriented around the production of those gametes.”

“Female” was defined in the bill as “a member of the human species who, under normal development, has XX chromosomes and produces or would produce relatively large, relatively immobile gametes, or eggs, during her life cycle and has a reproductive and endocrine system oriented around the production of those gametes.”

Plaintiffs who identify as transgender, nonbinary, intersex and other identities sued, arguing the law denies legal recognition and protection to people who identify as gender-nonconforming. (ALLISON DINNER/AFP via Getty Images)

The law was sponsored by Republican state Sen. Carl Glimm, who said the legislation was needed after a state judge ruled in 2022 that transgender people could change the gender markers on their birth certificates.

Republican Gov. Greg Gianforte is proud of the law he signed, which he said codified the long-recognized and commonsense definition of sex, the governor’s spokesman Sean Southard told The Associated Press.

“Words matter. And this administration is committed to ensuring words have meaning, unlike this judge, who apparently needs a dictionary to discern the difference between a noun and a verb,” Southard said.

Montana Attorney General’s Office spokeswoman Emilee Cantrell said her office would continue to defend the law “that reflects scientific reality.”

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Republican Gov. Greg Gianforte is proud of the law he signed, a spokesman for his office said. (Garrett Turner/Office of the Governor)

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The American Civil Liberties Union of Montana applauded the ruling.

“Today’s ruling is an important vindication of the safeguards that the Montana Constitution places on legislative enactments,” ACLU of Montana legal director Alex Rate said.

The bill was passed in 2023 during a legislative session when a ban on gender transition treatment for minors was also approved and when transgender Democrat state Rep. Zooey Zephyr was expelled from the House floor after a protest against Republican lawmakers who had silenced the Democrat.

The Associated Press contributed to this report.